The hard part is what those numbers mean for California now. To restore its economy, should California governments and investors try to rebuild that giant housing sector? Or would such a build-up only lead to another crash?

In other words, does California need a new economic model?

It's an important question, and one that's not being answered by political leadership or by the state's scholars. (The most popular answer -- jobs in an expanding green industry of energy efficient technologies -- is only a very small part of a potential answer).

Either way, it's unlikely -- and probably undesirable -- to have the housing sector grow back to its 2005 size. So something needs to replace that economic activity and jobs. But what?